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Sony to raise PS5 cost thanks to U.S. tariffs

Sony plans to raise all console prices to offset U.S. tariff hit

By Derek Strickland from Jul 31, 2019 @ 18:31 CDT

At a recent press event in Japan, Sony's corporate executives warn that console prices will rise to offset incoming trade tariffs.

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A bit ago I predicted the PlayStation 5 could end up being pretty expensive. It's specs alone speak of a premium system. The new PlayStation will have an AMD SoC with next-gen Navi GPU and Zen 2 CPU architectures for 4K gaming, 120Hz playback, and 8K output. Sony says it'll target enthusiast gamers, and that it won't replace the existing PS4 lineup.

The U.S.-China trade war could inflate prices even more. Sony previously delivered a joint letter with Nintendo and Microsoft who all warned the tariffs would massively disrupt the complex supply lines of the games industry. As a result, the Big Three said, games console hardware would likely rise in price.

Now Sony is delivering a second warning that consumers will be directly impacted by the proposed tariffs. The company says that existing and new console hardware will cost more upfront.

Read Also: PlayStation 5: Everything We Know So Far

This move will massively affect the industry as a whole and could very well disrupt Sony's gaming business as consumers opt out of buying dedicated machines due to pricing.

The new regulations, which haven't been put into place yet, call for an extra 25% ad valorum tax on consoles and peripherals assembled and shipped out of China. Most of today's technology comes from China's widespread fabrication facilities, and the chips that power video game consoles usually come from Foxconn plants in the region. Sony, Nintendo and Microsoft are currently making long-term deals with South Korean fabrication facilities in an attempt to move out of China.

Essentially these tariffs will ensure the PlayStation 5 is more expensive than it already was. It's likely Sony nor Microsoft currently don't know exactly how to price their respective next-gen systems at a hardware level, and this political red tape will impact that decision.

Sony's next-generation PlayStation 5 is likely due out sometime in holiday 2020 to counter Microsoft's new Project Scarlett system.

PlayStation 5 confirmed specs:

  • Navi GPU Zen 2 CPU
  • Ultra-fast SSD (likely via PCIe 4.0)
  • Support for 4K 120 Hz TVs
  • Ray-tracing enabled
  • 8K graphics support (probably video, not gaming)
  • Plays all PS4 games
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NEWS SOURCES:Wsj.com


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